Nitel/Mtel: Disquiet over secret handing of sale proceeds

The refusal to disclose the actual proceeds realised from the sale of two public owned firms, Nitel and M-tel, has pitted creditors to the liquidated firms against the appointed liquidator, Otunba Olutola Senbore.

NATCOM Consortium, which acquired the core assets of Nitel and M-tel, had paid $252.25 million in 2015 for the acquisition, shortly before the exit of the last administration.

The liquidated assets included Nitel’s 6.3 percent shareholding in the SAT-3 International Submarine Cable.

But shortly after assumption of office, President Muhammadu Buhari had, in August 2015, rejected NATCOM’s offer of the $252.25 million, insisting that the consortium must pay higher, to avoid shortchanging the Nigerian public.

Consequently, the consortium, was said to have agreed to make additional payments, with a directive from the Presidency that the company must effect full payment before it could be allowed to roll out it services.

Following the Presidency’s order, the creditors, numbering about 300, had hoped to get a higher percentage of their outstanding money.

The total liabilities of Nitel and M-tel are officially put at N350 billion.

The creditors’ total claims had been slashed down to about 40 percent by the liquidator, after due verification. This was because the proceeds realisable from the liquidated firms could not offset the liabilities.

NATCOM eventually rolled out its data and mobile call services on its network, Ntel, on May 1, 2016, apparently having complied with the Presidency’s directive.

But the creditors, who were being owed for upward of 10 years, were shocked when the liquidator, in late July, offered each of them only 1.5 percent of their outstanding claims.

For instance, some of them with outstanding claims of N10 million were paid N150, 000; those owed N5 million were paid N75, 000; one of them was paid N15, 000 out of an outstanding claim of over N1 million.

The creditors had received 15 percent of their verified claims in May 2015 and they were promised the remaining 85 percent “in due course” by the liquidator, only to be offered 1.5 percent two weeks ago.

They had expected higher payments in their claims as a result of the additional payments apparently made by NATCOM, as directed by the Presidency.

One of the creditors, Alhaji Kabiru Usman, who spoke to our correspondent at the weekend, said NATCOM could not have rolled out its services without making additional payment besides the initial $252.25 offer.

Besides the payments from NATCOM, huge debts owed Nitel and M-tel before its liquidation, were also recovered by the liquidator and added to the pool of funds meant to settle the creditors’ claims.

Senbore confirmed the payment of N1.5 percent of claims to each of the creditors, saying it was based on the amount of funds available.

He declined to confirm or deny additional payment by NATCOM.

Senbore, who responded to our correspondent’s inquiries by e-mail, also confirmed that monies were recovered for Nitel and M-tel from a number of public and private debtor organisations.

The liquidator said: “I refer to your mail on the above and provide below my answers. I am currently outside Nigeria and I have to respond to your mail urgently because of the importance I attach to the matters raised therein.

“NATCOM paid the $252 million it bidded for the core assets of Nitel and M-Tel. The amount was paid before 29 May 2015.

“In addition, we recovered money from banks, debtors, and from proceeds of sales of obsolete and scrapped items. The details are contained in the Receipts and Payments Accounts of the liquidated companies. The final accounts from March 2014 to 31 July 2016 are in the course of statutory audit.

“The major debtors are government sector organisations and a few companies in the private sector. The details are not with me here and are also in the financial information in the course of statutory audit.”

Repeated e-mail inquiries by our correspondent, requesting information on whether NATCOM made subsequent payments in addition to the initial $252.25 million were left unanswered.

The liquidator was non-committal on the probability of the creditors getting any other payments from their outstanding claims above the 1.5 percent, which he termed “liquidation dividends”.

Said he: “If we recover more funds from debtors, the net funds will be shared as liquidation dividends. If we do not achieve further recoveries, there will be no funds to pay additional liquidation dividends”.

He declined to give information on the total amount of recoveries from the debtor organisations and how much more is expected to be recovered from them.

On why information regarding proceeds from the public owned liquidated firms is being kept away from the public, Senbore said he had so far complied with disclosure requirements of the Company and Allied Matters Act (CAMA).

“We have complied with the disclosure requirements of CAMA. It is a court ordered liquidation. Please also note that the liquidation of Nitel and M-Tel is guided liquidation by the Bureau of Public Enterprises (BPE).

“The financial information is currently undergoing the process of statutory audit. The answers to the questions you asked are in most cases, usually and normally covered in the Liquidator’s Report which the Liquidator will provide at the statutory meetings of shareholders and creditors,” he said.